UK export growth slumps to lowest level since the Brexit referendum finds the European Export Index

UK export growth has fallen for a sixth consecutive quarter and is nearing the point of contraction, according to the latest European Export Index published by accountants and business advisers BDO LLP. Anna Tobin reports

UK export growth has dropped significantly and was the worst performing of the largest five EU economies in the last quarter, according to BDO LLP’s latest European Export Index. The UK’s Export Growth Index slumped to 95.6 in quarter 3 2018 from 97.6 the previous quarter and is creeping closer to the point of contraction, below 95.0. It is now at its lowest level since quarter 2, 2016, when the UK voted to leave the EU.

This slump in export growth is thought to be down to the uncertainty caused by Brexit negotiations and the rising price of UK exports. The UK’s Export Inflation Index, which reports the rate of year-on-year growth in export prices, has risen from 100.1 to 102.7 this quarter.

“UK export growth is on a downward trajectory and has now hit its lowest level since the UK decided to leave the EU,” says Peter Hemington, a partner at BDO LLP. “With party conference season upon us, we need clarity on the shape of Britain’s future trading arrangements so that UK exporters can prepare for the future with confidence.

“A rise in the proportion of British companies which export goods and services is also vital, spurred by meaningful government support and an ambitious industrial strategy which has exporting at its core.”

European exporters have also experienced a slight fall in orders. The Export Growth Index for the EU fell to 99.7 in the third quarter of this year, down from 99.8 in quarter two. European exporters are also likely to be hit by the trade war between the US and China.

Italy and Germany are bucking the downward trend, however. Italy’s Export Growth Index is at 100.2, up from 98.9 the previous quarter, and above the long-term growth trend of 100. Germany Export Growth Index is up from 98.9 last quarter to 99.4 this quarter.

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